Britain's finance ministry said on Tuesday that its priority was "getting the best value for the taxpayer, maximizing support for the economy and restoring private ownership".

"Building a stronger banking system is a core part of the government's long-term economic plan to deliver greater economic security," a Treasury spokesman said.

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The first sale was priced at 75 pence per share, a 3 percent discount to the closing price of 77.36 pence on the date that it was launched, and ahead of the 73.6 pence price at which the government bought the shares.

Sources familiar with the matter told Reuters a similar discount to the market price is likely in the latest sale, with a price between 76 and 77 pence per share possible.

UKFI is expected to sell more shares later in the year in an offer which will include private retail investors. Sources familiar with the matter say that UKFI believes an offer to retail investors will be easier to execute once there is greater clarity over Lloyds' dividends prospects.

The sale is a vindication for Lloyds' Chief Executive Antonio Horta-Osorio, who has restored the bank to profitability since his appointment in 2011, simplifying the business to focus on lending to UK households and businesses.

"This reflects the hard work undertaken over the last three years to make Lloyds a safe and profitable bank that is focused on helping Britain prosper," Horta-Osorio said on Tuesday.

Bank of America, Merrill Lynch, JP Morgan, Morgan Stanley and UBS have been appointed to act as bookrunners. Lazard also acted as an adviser to UKFI.